Aico recalls subsidiary directors

Business Reporter
THE unbundling of Zimbabwe Stock Exchange listed Aico Africa has begun with the group withdrawing directors it had seconded to the boards of its subsidiary companies. Aico group has a 100 percent stake in Cottco, its flagship subsidiary, 49 percent in Olivine and about 50 percent in Seed Co, also listed on the Zimbabwe Stock Exchange.

Aico announced the intention to unbundle last year, a process that would involve a series of transactions. These include disposal of its 51 percent stake in Olivine with proceeds meant to settle some of the Cottco’s debts. The group will also raise funding to pay off its direct borrowings and Cottco’s borrowings it guaranteed.

Aico is proposing to raise US$20 million through the disposal of its 10 percent stake in Seed Co to Vilmorin & Cie and US$29 million rights issue to Aico shareholders. Seed Co shareholders have already approved the sale of the company’s 25 percent stake to US based seed company Vilmorin & Cie in a deal worth US$60 million.

The two-tier transaction will see Aico selling 15 percent of its majority stake to Vilmorin in the first transaction and another 10 percent batch in the second transaction.

Simultaneously, as part of a call option share placement, Aico will sell a portion of its Seed Co ordinary shares, being 20 546 096 shares, at US$0,9925 per share, to realise US$20,39 million. Aico, an agro-processing firm will then unbundle through the distribution to shareholders of the remaining Seed Co shares through a dividend-in-specie.

Upon implementation of these proposals, Cottco will remain the only operating subsidiary and will relist as Cottco Holdings. Simultaneously, Aicowill delist from the ZSE.

Sources said Aico has withdrawn Mr Innocent Chagonda, Ms Catherine Chitiyo, Mr Bernard Mudzimuirema, Mr Albert Nhau and Mr Patrick Devenish from the Cottco board. Mr Nhau was the Cottco chairman and Mr Devenish chief executive of Aico. Mr Chagonda is chairman of the National Social Security Authority, a 22 percent shareholder in Aico.

The group has also withdrawn Aico chairman Mr Bekithemba Nkomo, Mr Devenish, Mr Mudzimuirema and Mr Pat Rooney from the Seed Co board. Mr Nkomo was the chairman of Seed Co. On the Olivine board, Aico had seconded Mr Nhau, Mr Devenish and Mr Madzimure. The Aico board will remain in place until completion of the unbundling.

“Aico had seconded members to sit on boards of its subsidiaries. But since Aico structure is falling away, those seconded will no longer have interests to represent,” said one source.

Contacted for a comment Mr Devenish said the withdrawals were part of the unbundling.

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